Updated as of January 2017
It seems that more people are becoming aware that down payment assistance programs are available and how to qualify for them. It’s hard to tell exactly why more people are learning about the possibilities, but recently, I dedicated a little time and effort to creating a resource that people can use that hopefully makes it easier to find down payment assistance programs in your area – DPASearch.com.
Down Payment Assistance Programs: Available Where You Live?
For the most part, whether you are eligible for some type of down payment assistance program is going to depend on at least one of these:
- Where the house is (what neighborhood, city, state, etc.)
- What your income is
- What your occupation is
With thousands of down payment assistance programs available across the United States, it is generally going to make sense to do your own research first, but then also reach out to a number of different loan officers or Realtors and see if they are aware of a program that you may qualify for. Generally, loan officers and Realtors are happy to help you because that is what they do … help people buy houses.
Saving For a Down Payment: It Isn’t Easy
A study among renters about their biggest obstacle to owning a home put “saving enough for a down payment” at the top of the list of obstacles to overcome. Logic tells me that at least *some* of the people who currently think that saving enough for a down payment is their biggest issue may be surprised to learn that help is available.
Types of Down Payment Assistance
Recently, one study by RealtyTrac said that “ 87 percent of homes in the US qualify for down payment assistance“. That’s surprising! As a general rule, there are three different types of down payment assistance. Grants, Second mortgage loans and Tax credits.
- Grants: Funds that you do not need to pay back – as long as you own and live in your home for a specific period of time.
- Second mortgage loans: The most common down payment source, these have low or no interest rates and the payments are deferred over a specific time period.
- Tax credits: Certain states and local governments, including Housing Finance Agencies, issue mortgage credit certificates which reduce the amount of income tax you pay, thus giving you more available income upfront to make your down payment or pay for closing costs.
Get Help For Free
To start with, you can search for down payment assistance programs in your area on DPASearch.com. Once you narrow down at a high level what is available (I do my best to keep the information up to date), the next step is to contact a loan officer or Realtor. You can start here for that. Working with a loan officer is free and should be easy – if it isn’t, find another loan officer.
But with 87% of homes qualifying for some type of down payment assistance, it seems that it is worth your time to investigate.